Designing for Verifiable Operations For an operator serving tenants across jurisdictions, a claim about where a workload runs must be one that the responsible service provider can substantiate. That means identifying who can administer the workload, how data moves between regions, where backups are maintained, and which records document those arrangements. A tenant promising to run a workload within a particular jurisdiction needs assurance that its data, backups, and access arrangements satisfy the applicable requirements. Workload placement alone cannot establish where a backup resides or from where an administrator can access a system. Those questions must be addressed across compute, storage, network paths, security controls, and third-party access, with responsibilities established during procurement and verified before service begins. Not all of those controls necessarily reside with the data center operator. A colocation provider may be responsible for physical access, facility security, and designated infrastructure services, while a tenant or cloud provider controls the applications, storage configuration, backup locations, and logical access to workloads. The operating agreement must distinguish between what the facility provider can verify directly and what remains within the tenant’s systems. The EU AI Act makes that division of responsibility particularly important. Its requirements for covered high-risk AI systems include logging, documentation, human oversight, robustness, and cybersecurity, subject to the law’s applicable implementation dates. These obligations attach to the relevant providers and deployers of AI systems, rather than automatically to every company hosting them. A data center operator may nevertheless be required by contract to provide physical-access records, security evidence, or information about infrastructure location so that a tenant can substantiate its own compliance. A further distinction concerns data residency. The AI Act is not itself a general requirement to keep all AI workloads or associated data within the European Union. Geographic restrictions may instead arise from data-protection

“We remain committed to both the Loughton project and the UK, and we are exploring alternative power sources for the site, as well ​as other expansion sites in the UK,” Nscale added. “This decision relates to a single ​site,” a Microsoft spokesperson said of its termination of an agreement for the data ​center in Loughton, Essex, where Nscale had faced delays, with electricity grid ⁠officials telling the AI company they did not expect to supply power to the site ​until the 2030s. “Our relationship with Microsoft remains strong and long-term, and this unfortunate London-wide grid ​issue has no impact on our other contracts,” a spokesperson for Nscale told Reuters.

Aviz Networks: Aviz, which received early funding help from Cisco, offers a pre-tested, multi-ASIC, hardware agnostic, enterprise-ready SONiC distro with added features such as bug fixes, telemetry and support. Hedgehog Networks: Founded by former Cisco exec Marc Austin in 2022 to bring SONiC-based disaggregated networking to the enterprise, Hedgehog’s mission is to simplify the deployment of private cloud AI networks with automation and orchestration based on Kubernetes. Upscale AI: This startup has raised $500 million with the goal of building a new networking platform from ground up, starting with its own silicon. The company is targeting AI data centers as its sole market and is using SONiC as the NOS. Most recently, Upscale introduced Token Fabric architecture, which combines the company’s own SkyFabriX scale-up silicon, scale-out systems built on Nvidia Spectrum-X Ethernet, and a common software layer for operations. General availability is planned for early 2027. The announcement builds on two earlier milestones. Upscale, based in Santa Clara, Calif., emerged from stealth in September 2025 with a $100 million seed round. In June, it raised an additional $190 million  4. SONiC expands beyond the data center Community support is the lifeblood of any open-source project. Under the Linux Foundation, the SONiC community has grown to more than 4,300 contributors. Heavyweight members include Alibaba, Arista, Broadcom, Cisco, Dell, Google, Microsoft, Nokia, and Nvidia. The SONiC community is currently working to extend the technology from the data center to the network edge. The PoE Edge Networks with SONiC (PENS) workgroup, led by Aviz, Wistron, Cisco and Celestica, is working to adapt SONiC for edge LANs. Specifically, the group is integrating protocols consistent with Wi-Fi networks and IoT devices, such as Power Over Ethernet (PoE) and 802.1x.

This will complete SONiC integration across the Cisco multi-silicon Nexus switching portfolio, according to a blog post by Surbhi Paul, director, product management, for data center AI networking at Cisco.  “For organizations deploying Cisco 8000 Series across WAN backbones and core transport, extending Cisco-validated SONiC to the Nexus switches creates a unified, end-to-end, open network fabric,” Cisco stated. “Customers eliminate vendor silos, leveraging a single supply chain, shared FRR routing tools, and one Technical Assistance Center (TAC) contract from the WAN edge deep into the data center core.” “Built for AI infrastructure providers scaling 8000 to 32,000+ GPU clusters. High-density 400G/800G Cisco Nexus (N9100) switches (NVIDIA Spectrum-X) and Cisco Nexus (Cloud Scale) switches allow architects to tune RoCEv2 congestion algorithms (PFC/ECN) within SONiC, maximizing GPU training efficiency without risking multi-vendor support fragmentation,” Cisco stated.

The AI infrastructure buildout is measured in gigawatts and successive generations of accelerators. But as operators bring new compute capacity online, a less visible question is gaining financial urgency: What happens to GPU systems when their first production assignment ends? For hardware that remains functional but no longer meets the performance or efficiency requirements of a leading-edge AI cluster, retirement need not mean obsolescence. Equipment may be redeployed, resold, harvested for components or processed to recover materials. The outcome depends on decisions made long before a system leaves its rack. That was the central argument advanced by Linda Li, chief strategy officer of Re-Teck and its parent company, Li Tong Group, in the latest onsite installment of the DCF Show podcast, hosted by Data Center Frontier Contributing Editor Doug Black at the DCF Trends Summit 2026 in Northern Virginia. For Li, the acceleration of GPU refresh cycles is making lifecycle management a question of capital preservation, facilities design and executive governance—not merely IT asset disposition. Plan for the Exit Before the Equipment Arrives Li draws on more than two decades of her company’s work in reverse supply chains for consumer electronics and telecommunications equipment. Both sectors have managed rapid generational shifts without assuming that every displaced device had exhausted its useful life. “We are dealing with a totally different organism,” she said, describing the combination of rapid accelerator iterations, rising rack power density and increasingly sophisticated thermal requirements. The response, in her view, has two levels. The first is physical infrastructure: facilities designed to accommodate successive generations of servers without extensive reconstruction. Scalable power distribution, adaptable raceways, modular rack systems and high-capacity air and liquid cooling can create room for hardware transitions that may arrive sooner than originally expected. The second is the network of partners and contracts around the

Memphis has emerged as a major center of AI infrastructure development, driven largely by the extraordinary scale of xAI’s Colossus supercomputing operations. But the city’s growing AI computing market extends beyond Elon Musk’s flagship project. At the former headquarters and distribution complex of discount retailer Fred’s, 5C Data Centers is developing another substantial AI computing facility, combining industrial adaptive reuse with a phased expansion strategy and plans for behind-the-meter power generation. On October 6, 2026, a $575 million commercial alteration permit application was filed for the fourth phase of 5C’s MEM01 data center at 4300 Getwell Road. The application covers approximately 504,000 square feet of the property’s 1.1 million-square-foot building, representing the largest construction phase yet proposed at the site. MEM01 is already operating. According to September reporting from The Daily Memphian, 5C had established operations in approximately 200,000 square feet of the former Fred’s property, leaving substantial additional space available for conversion. The latest permit application marks a significant escalation in the scope of the development. The expansion also introduces a major new element to 5C’s power strategy. On October 11, 5C Group Chief Revenue Officer Brad Nimri told The Daily Memphian that the company plans to increase available power at MEM01 from approximately 20 MW to 84 MW over the next six months, using fuel cell technology to supply the additional capacity rather than relying on a corresponding increase in electricity from Memphis Light, Gas and Water (MLGW). Like Colossus, which began with the conversion of a former Electrolux manufacturing facility, 5C’s development reflects the growing role of industrial adaptive reuse in AI infrastructure. The projects differ considerably in scale and their approaches to on-site power generation, but both illustrate the challenge of transforming existing industrial properties into high-density computing environments with substantial electrical requirements. As Memphis considers